impact of knowledge management on corporate peformance

Impact of Knowledge Management on Corporate Performance: A Theoretical Discussion : 

Impact of Knowledge Management on Corporate Performance: A Theoretical Discussion Rahul Hakhu Thapar University, Patiala

Contents : 

Contents Introduction Significance of Culture in Organization Benefits of Successful Implementation of KSC Potential Causes of Failure in Implementing Effective KM Concluding Remarks

Introduction : 

Introduction “Knowledge is one of the important intangible assets of human being on the earth” It is considered as the key of the evolution of human civilization of the world. Since time immemorial the evolution of human civilization has been enriched, and developed by the proper and effective knowledge sharing culture carried out by different generations. The modern civilization is the outcome of that persistent knowledge sharing system and perennially taking its logical and scientific shape from it.

Slide 4: 

The assets are classified into two types: Tangible assets Intangible assets The tangible assets are those, which are visible and having their material existence. These are, for instance, land, gold, cash, diamond, goods etc., whereas intangible assets are those, which are invisible. Knowledge is one of the important intangible assets of human being. “Knowledge is nothing but experience, values, contextual information, and expert insight".

Slide 5: 

To some researchers knowledge management (KM) is: Getting the right information to the right person at the right time.

Slide 6: 

KM is effective in creating various benefits such as, Revenue growth Production innovation Profit growth Enhancing customer focus, Improving competitive Marketing both in short term and long term for a company The knowledge sharing culture is deeply rooted in the organizational structure of the entire company. In the era of globalization and liberalization the development of a sustainable knowledge sharing culture has become one of the most important tasks on the part corporate mangers of any forward looking companies not only in the advanced countries but also in developing countries like India.

Significance of Culture in Organization : 

Significance of Culture in Organization Source: Smith A. & McKeen (2003 Culture Influences Activities in All Spheres of the Organization

Slide 8: 

. Source: Smith A. & McKeen (2003) Culture operates in many different Spheres of an Organization

Benefits of Successful Implementation of KSC : 

Benefits of Successful Implementation of KSC 17 companies in India are taken for the study by Desai (2002) to find out various aspects of KM by using questionere method. The selection of the respondents is based on the basis of the size of the companies. The respondent’s industry profile comprises of Business and Finance, retail distribution, Telecommunication Electrical and Eltronics, Pharmaceuticals, Information Technology, Chemical and Food and others.

The companies are : 

The companies are Reliance Industries Ltd Hindustan Unilever Ltd Infosys Technologies Ltd Oracle Software India Ltd Ranbaxy Laboratories Ltd Satyam Computers Services Ltd Aptech Ltd Zensar Technology Ltd Indo-Rama Synthetics Ltd UDV India Ltd Enron-Oil and Gas Lt International Fragrance and Flavours Ltd Eicher Motors Ltd IL&FS. Patni Computers Ltd Clipsal Industries India P. Ltd Duncan Infotech.

Slide 11: 

75 % of the respondents of total 17 selected companies have already KM strategy in place. 19% have no KM programme as such while rest 6% don’t have any idea about KM and its benefits Most of the respondents are well aware about the potential pay back that KM can achieve. Companies identify the KM to participate significantly in improving revenue growth ( 94%) , competitive advantage (94%) and overall employee development (81%) in the long run Similarly they also consider reducing cost (69%), improving marketing (69%) and enhancing customer focus as a short term or immediate benefits of successfully implementing KM through the development of a sound KSC. The major findings of the study are as follows:

Potential Causes of Failure in Implementing Effective KM : 

Potential Causes of Failure in Implementing Effective KM Lack of user uptake due to insufficient communication in the organization structure. Integrating of KM activities into everyday working processes Users unable to identify personal benefits Senior management not fully focused in implementing a KM Programme and its ignorance about its huge benefits for achieving higher corporate performance in terms of rising profit and cost reduction Lack of proper training for promoting a sound KM in the organization Insufficient Technical support provided by the top management of the company. Poor motivation for knowledge sharing behavior

Concluding Remarks : 

Concluding Remarks To conclude, a firm based on the successful KM through sound KSC could easily reap the benefits of higher revenue growth, higher growth, competitive advantage, marketing advantage, employee development etc., in contrast to the firms who do not have sound KSC in the present era of globalization and liberalization.